By Allen Stockbridge JD CCIM
bXb M&A Advisors |eXp Commercial
The Business Mergers and Acquisitions space has evolved dramatically in the last ten years with more training, professionalism, and focus among the best practitioners.
Residential Brokers who do some commercial transactions, known as “Resimercial brokers” may not have the sophistication, training, experience or contacts that might serve you best.
Look for a full-time professional who focuses on business brokerage only. Most resimercial brokers will take the assignment hoping for the best, without the best training, tools and network to get it done.
Most of the top commercial real estate brokerage firms prohibit their producers from entering this realm, which is fundamentally different from commercial-investment brokerage, although real estate is often involved in business transactions. Relying on a full-time commercial real estate professional may cause you to miss out on the nuances, and range of prospective buyers that a full-time business intermediary can provide.
At the early stage of considering a business sale and exit, it is best to contact two – three middle-market M&A Advisors and learn enough about them to find the one that fits your needs the best.
Often your business attorney and Certified Public Accountant will know a strong M&A professional in your business type or geographic area.
Regardless of the expected selling value of your business, consider looking for an Advisor with a Business Brokerage Designation or credential.
For the Main Street and lower Middle-Market deals valued under $2 million, the International Business Brokerage Association (IBBA) has top educational programs, faculty, staff, and resources to support leaders in the industry. They offer the Certified Business Intermediary (CBI) Designation to Advisors who have education, deal experience, and participation in the IBBA network, which is often a pathway to identifying a group of qualified buyers. https://www.ibba.org/cbi-certification/
Middle Market Sellers in the $2 - $20 million range should engage Mergers and Acquisitions Specialists, many of whom belong to M&A Source and who may have earned the Mergers and Acquisitions Master Intermediary Designation (M&AMI). https://masource.org/mami-certification/, the highest level of certification for the more sophisticated transactions.
These trained professionals are most likely to help you achieve your objectives for a prompt sale, the top value, or the right buyer, depending on your priorities.
Once you have interviewed and received proposals and feel comfortable with one broker, sign a confidentiality agreement and share detailed company information. This detailed information will be pored over by the business intermediary and their team to flesh out all of the nuances, and opportunities for value creation or presentation.
Simultaneously, a Sole and Exclusive Listing Agreement will be presented that provide details covering all types of transactions, and will be necessary to engage a quality broker who will pro-actively represent your best interests. This is a lengthy complex document designed to cover any eventuality in the sale of your business and creates a strong fiduciary agreement with you and your broker.
You are on the same team and will work closely together to get the business ready for sale, and sold. Picking the right professional, in whom you have confidence, is as important as anything. You will have a relationship that will last from four to 24 months, to get to Closing. This should be a ride of a lifetime, with an outcome that will be beneficial for all concerned. Enjoy…